5-Star Stocks: Banks & Energy

In a market full of turbulence, what ideas does a five-star fund manager have for investors?

Daniel Brewer's Rainier Small/Mid Cap Fund is up an average of 15.73 percent per year for the last five years.

He's wary of looking to those small- and mid-cap stocks for instant results right now.

"I'm not sure that they're ready to launch on another significant bull rally," Brewer told CNBC. "Definitely, it's a group that had been heavily shorted after multiple years of outperformance. The group had been a laggard, so it makes sense that the group has steadied."

Recommendations:

Brewer chooses with special care in the financial space.

One of his selections there is Annaly Capital Management.

"Recently, we have added in some small, community-oriented banks such as Prosperity (Bancshares) and Glacier (Bancorp)," he said. "These are smaller banks where they're less credit-exposed, still have a very good deposit base, and we think, potentially, the worst is over in terms of the carnage within the financial industry."

In the energy space, where McDermott International and Noble are on his list, Brewer sees success as highly conditional as well.

"As long as the commodity prices stay roughly where they are at this point, they key drivers of energy shares remain intact."